Counterfeiting and piracy are longstanding problems growing in scope and magnitude. They are of great concern to government and industry because of (i) the negative impact they can have on innovation, economic growth, and employment, (ii) the threat they pose to the welfare of consumers, (iii) the substantial resources that they channel into criminal networks, organized crime, and other groups that disrupt and corrupt society, and finally, (iv) the loss of business from the trade in counterfeits.
Innovation in the business sector has always been the main driver of economic growth, through the development and implementation of ideas for new products and processes. These inventions are usually protected via patents, copyrights, and trademarks. However, without adequate protection of these intellectual property (IP) rights, the incentives to develop these new ideas and products would be considerably reduced, thereby weakening critical thinking and the innovation process. These risks are particularly high for those industries in which the research and development (R&D) costs associated with the development of new products are very high compared to the cost of producing the resulting products. In the world of electronics, the R&D costs for the semiconductor industry are especially high, and protection of their IP rights is of the utmost importance.
Counterfeiting of integrated circuits has become a major challenge due to deficiencies in the existing test solutions and lack of effective avoidance mechanisms in place. Over the past couple of years, numerous reports have pointed to the counterfeiting issues in the US electronics component supply chain. A Senate Armed Services public hearing on this issue and its later report clearly identified this as a major issue to address because of its significant impact on reliability and security of electronic systems. As the complexity of the electronic systems, along with the ICs used in them, has increased significantly over the past few decades, they are assembled (fabricated) globally to reduce the production cost. For example, large foundries located in different countries can offer lower prices to the design houses. This globalization leads to an illicit market willing to undercut the competition with counterfeit parts. If these parts end up in critical applications like defense, aerospace, or medical systems, the results could be catastrophic.